UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549


FORM
10-Q





x            QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE
SECURITIES ACT OF 1934





For
the quarterly period ended March 31, 2009


OR


 ̈           TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE
SECURITIES ACT OF 1934





For
the transition period from ___________to ____________





Commission File Number
000-53238


CEMTREX,INC.




(Exact
name of small business issuer as specified in its charter)




Delaware
              (State
      or other jurisdiction of incorporation or
              organization)
            30-0399914
              (I.R.S.
      Employer Identification No.)





19
Engineers Lane,


Farmingdale,
New York 11735


(Address,
including zip code, of principal executive offices)





631-756-9116


(Issuer’s
telephone number)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.





x
              Yes
              
              
              No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer
            Accelerated
      filerNon-accelerated
      filer
            Smaller
      reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes
              
              x
              No





Indicate the number of shares
outstanding of each of the issuer’s classes of common stock, as of the latest
practicable date: As of
April 30, 2009, the issuer had one class of common stock, with a par value of
$0.001, of which 34,327,862 shares were issued and
outstanding.





Table of
Contents




CEMTREX,
INC.




INDEX




PagePART
      I. FINANCIAL INFORMATION
              
              4Item
      1.
              Condensed
      Financial Statements
              
              4Consolidated
      Balance Sheets as of  March  31, 2009 (Unaudited) and
      September 30, 2008
              
              4Consolidated
      Statements of Operations for the Three Months Ended March 31, 2008 and
      March 31, 2009 and the Six Months Ended March 31, 2008 and March 31,
      2009(Unaudited)
              
              5Consolidated
      Statements of Cash Flows for the Six Months Ended March 31, 2008 and March
      31, 2009 (Unaudited)
              
              6Notes
      to Unaudited Condensed Consolidated Financial Statements
              
              7Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              
              14Item
      3.
              Quantitative
      and Qualitative Disclosures about Market Risk
              
              29Item
      4.
              Controls
      and Procedures
              
              29PART
      II.
              OTHER
      INFORMATION
              
              30


2




Item
      1.
              Legal
      Proceedings
              
              30Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              
              34Item
      3.
              Defaults
      Upon Senior Securities
              
              34Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              35Item
      5.
              Other
      Information
              
              35Item
      6.
              Exhibits
              
              35SIGNATURES
              
              36


3


Part I. Financial
Information




Item
1. Financial Statements


CEMTREX,
INC. AND SUBSIDIARY


CONSOLIDATED
BALANCE SHEETS


(UNAUDITED)


(IN
US$)


March 31,
                  
                  
                  September 30,2009
                  
                  
                  2008AssetsCurrent
      AssetsCash
      & Equivalents
                  
                  $
                  54,998
                  
                  
                  $
                  60,610Accounts
      Receivable
                  
                  
                  1,256,317
                  
                  
                  
                  1,528,231Inventory
                  
                  
                  437,794
                  
                  
                  
                  456,567Prepaid
      Expenses & Other Assets
                  
                  
                  9,130
                  
                  
                  
                  8,100Total
      Current Assets
                  
                  
                  1,758,239
                  
                  
                  
                  2,053,508Property
      & Equipment, Net
                  
                  
                  98,224
                  
                  
                  
                  180,519Other
                  
                  
                  234,484
                  
                  
                  
                  4,225Total
      Assets
                  
                  $
                  2,090, 947
                  
                  
                  $
                  2,238,252Liabilities & Stockholders' Equity
      (Deficit)Current
      LiabilitiesAccounts
      Payable
                  
                  $
                  839,559
                  
                  
                  $
                  940,071Accrued
      Expenses
                  
                  
                  719,365
                  
                  
                  
                  906,259Income
      Taxes Payable
                  
                  
                  54,415
                  
                  
                  
                  -Customer
      Deposits
                  
                  
                  -
                  
                  
                  
                  -Notes
      Payable-Shareholder
                  
                  
                  321,141
                  
                  
                  
                  467,171Total
      Current Liabilities
                  
                  
                  1,934,520
                  
                  
                  
                  2,313,501Convertible
      Debenture
                  
                  
                  1,300,000
                  
                  
                  
                  1,300,000Total
      Liabilities
                  
                  
                  3,234,520
                  
                  
                  
                  3,613,501Commitments
      & Contingencies
                  
                  
                  -
                  
                  
                  
                  -Stockholders'
      Equity (Deficit)Common
      Stock, $0.001 par value, 60,000,000 sharesAuthorized:
      34,327,862 shares issued and outstanding.
                  
                  
                  34,328
                  
                  
                  
                  34,328Additional
      Paid-in Capital
                  
                  
                  (1,259,524
                  )
                  
                  
                  (1,259,524
                  )Accumulated
      Deficit
                  
                  
                  81,623
                  
                  
                  
                  (150,053
                  )Total
      Stockholders' Equity (Deficit)
                  
                  
                  (1,143,573
                  )
                  
                  
                  (1,375,249
                  )Total
      Liabilities & Stockholders' Equity (Deficit)
                  
                  $
                  2,090,947
                  
                  
                  $
                  2,238,252




The
accompanying notes are an integral part of these financial
statements


4


CEMTREX,
INC. AND SUBSIDIARY


CONSOLIDATED
STATEMENT OF OPERATIONS


(UNAUDITED)


(IN
US$)




For the Three Months Ended
                March 31
              
              
              For The Six Months Ended
                March 312009
              
              
              2008
              
              
              2009
              
              
              2008Revenues
              
              $
              1,753,662
              
              
              $
              2,004,039
              
              
              $
              3,974,623
              
              
              $
              3,242,474Cost
      of Goods Sold
              
              
              931,018
              
              
              
              1,212,126
              
              
              
              2,246,536
              
              
              
              1,772,345Gross
      Profit
              
              
              822,644
              
              
              
              791,913
              
              
              
              1,728,087
              
              
              
              1,470,129Operating
      Expenses
              
              
              620,558
              
              
              
              616,288
              
              
              
              1,386,250
              
              
              
              1,132,402Operating
      Income (Loss)
              
              
              202,086
              
              
              
              175,625
              
              
              
              341,837
              
              
              
              337,727Other
      Income (Expense)Other
      Income
              
              
              -
              
              
              
              36
              
              
              
              -
              
              
              
              606Interest
      Expense
              
              
              (26,000
              )
              
              
              (28,992
              )
              
              
              (55,746
              )
              
              
              (60,627
              )Total
      Other  Income (Expense)
              
              
              (26,000
              )
              
              
              (28,956
              )
              
              
              (55,746
              )
              
              
              (60,021
              )Net
      Income (Loss) Before Income Taxes
              
              
              176,086
              
              
              
              146,669
              
              
              
              286,091
              
              
              
              277,706Provision
      for Income Taxes
              
              
              (54,415
              )
              
              
              (31,100
              )
              
              
              (54,415
              )
              
              
              (31,100
              )Net
      Income (Loss)
              
              $
              121,671
              
              
              $
              115,569
              
              
              $
              231,676
              
              
              $
              246,606Income
      (Loss) Per Share-Basic and Diluted
              
              $
              0.00
              
              
              $
              0.00
              
              
              $
              0.01
              
              
              $
              0.01Weighted
      Average Number of Shares
              
              
              34,327,862
              
              
              
              34,327,862
              
              
              
              34,327,862
              
              
              
              34,327,862




The
accompanying notes are an integral part of these financial
statements


5





CEMTREX,
INC. AND SUBSIDIARY


Consolidated
Statement of Cash Flows (Unaudited)


(IN
US$)




For the Six MonthsEndedMarch 31,2009
                  
                  
                  2008Cash Flows from Operating
      ActivitiesNet
      Income (Loss)
                  
                  $
                  231,676
                  
                  
                  $
                  246,606Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      & Amortization
                  
                  
                  14,247
                  
                  
                  
                  7,742Changes
      in operating assets and liabilities:Accounts
      Receivable
                  
                  
                  271,914
                  
                  
                  
                  36,546Inventory
                  
                  
                  18,773
                  
                  
                  
                  (75,065
                  )Prepaid
      Expenses & Other Assets
                  
                  
                  (1,030
                  )
                  
                  
                  4,225Other
      Assets
                  
                  
                  (230,259
                  )
                  
                  
                  (
      1,589
                  )Accounts
      Payable
                  
                  
                  (100,472
                  )
                  
                  
                  (158,850
                  )Accrued
      Expenses
                  
                  
                  (186,894
                  )
                  
                  
                  14,472Income
      Taxes Payable
                  
                  
                  54,415
                  
                  
                  
                  31,100Customer
      Deposits
                  
                  
                  -
                  
                  
                  
                  (85,516
                  )Net
      Cash Used in Operating Activities
                  
                  
                  72,370
                  
                  
                  
                  19,671Cash Flows from Investing
      ActivitiesPurchase
      of Property and Equipment
                  
                  
                  -
                  
                  
                  
                  (151,938
                  )Cash  Received
      on Sale of Equipment
                  
                  
                  68,048
                  
                  
                  
                  -Net
      Cash Used in Investing Activities
                  
                  
                  (68,048
                  )
                  
                  
                  (151,938
                  )Cash Flows from Financing
      ActivitiesNet
      Loans from Shareholders
                  
                  
                  (146,030
                  )
                  
                  
                  178,648Common
      Stock Issued for Cash
                  
                  
                  -Net
      Cash Provided by Financing Activities
                  
                  
                  (146,030
                  )
                  
                  
                  178,648Net
      Increase (Decrease) in Cash
                  
                  
                  (5,612
                  )
                  
                  
                  46,381Cash
      Beginning of Period
                  
                  
                  60,610
                  
                  
                  
                  143,830Cash
      End of Year
                  
                  $
                  54,998
                  
                  
                  $
                  190,211Supplemental
      Disclosure of Cash Flow Information:Cash
      Paid during the period for interest
                  
                  $
                  -
                  
                  
                  $
                  -Cash
      Paid during the period for income taxes
                  
                  
                  -
                  
                  
                  
                  -




The
accompanying notes are an integral part of these financial
statements


6


CEMTREX,
INC. AND SUBSIDIARY


Notes
to Consolidated Financial Statements (Unaudited)




Note
1 – Organization, Business & Operations




Cemtrex,
Inc. and its wholly-owned subsidiary Griffin Filters, LLC (collectively the
“Company”), is engaged in manufacturing and selling the most advanced
instruments for emission monitoring of particulate, opacity, mercury, sulfur
dioxide, nitrogen oxides, etc. Cemtrex also provides turnkey services for carbon
creation projects from abatement of greenhouse gases pursuant to Kyoto protocol
and assists project owners in selling of carbon credits globally. Cemtrex also
markets technologies for control of ventilation Air Methane from coal mines and
creating energy efficiency in HVAC systems for commercial buildings and
industrial installations. Company's products are sold to power plants,
refineries, chemical plants, cement plants & other industries including
federal and state governmental agencies. Through its wholly-owned subsidiary,
Griffin Filters, the Company designs, manufactures and sells air filtration
equipment and systems to control particulate emissions in a variety of
industries.




Cemtrex,
Inc. was incorporated as Diversified American Holding, Inc. on April 27, 1998.
On December 16, 2004, the Company changed its name to Cemtrex, Inc. On April 30,
2007, Cemtrex, Inc. acquired Griffin Filters, LLC (see Note 6 – Business
Combination and Related Party Transactions).




Note
2 - Going Concern and Management's Plans




The
Company's primary source of operating funds since inception has been provided
through note and equity financing. The company shall raise additional capital
through private debt and equity investors as required for operations. At March
31, 2009, the Company had a stockholders' deficit of $1,143,573 and a working
capital deficit of $176,281. The Company wrote off goodwill of
$2,698,931  against Additional-paid-In-Capital on September 30, 2007
which was generated from the purchase of Griffin Filters LLC.




Management
has taken steps to improve the Company's liquidity by raising funds and seeking
revenue sources through the development of products through which the Company
may generate revenue. There can be no assurance that the Company will be
successful in these endeavors and therefore may have to consider other
alternatives.




The
accompanying consolidated financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. However, the above matters raise
substantial doubt about the Company's ability to continue as a going concern.
These financial statements do not include any adjustments relating to the
recovery of the recorded assets or the classification of the liabilities that
might be necessary should the Company be unable to continue as a going
concern.




Note
3 - Summary of Significant Accounting Policies




Principles
of Consolidation




The
accompanying consolidated financial statements include the accounts of Cemtrex,
Inc. and its wholly subsidiary Griffin Filters, LLC (collectively the
“Company”). All significant inter-company accounts and transactions have been
eliminated in consolidation.




The
acquisition of Griffin Filters, LLC by Cemtrex, Inc. was treated as a business
combination due to the fact that the acquired entity and purchased entity were
owned by the same individual. Therefore, these consolidated financial statements
have been retrospectively adjusted for all periods presented.




Accounting
Method




The
Company’s financial statements are prepared using the accrual method of
accounting.  The Company has elected a September 30
year-end.


7




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
expenses during the reporting period. Actual results could differ from those
estimates.




Cash
and Cash Equivalents




The
Company considers all highly liquid investments with a maturity of three months
or less when purchased to be cash equivalents




Concentrations
of Credit Risk - Cash




The
Company maintains its cash with various financial institutions, which may exceed
federally insured limits throughout the period.




Marketable
Securities Available for Sale




The
Company evaluates its investment policies and the appropriate classification of
securities at the time of purchase consistent with Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain investments in
Debt and Equity Securities," at each balance sheet date and determined that all
of its investment securities are to be classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses, net of tax, reported in stockholders' deficiency under the
caption "Accumulated Other Comprehensive Loss". Realized gains and losses and
declines in value judged to be other than-temporary on available-for-sale
securities are included in net gain on sale of marketable securities. The cost
of securities sold is based on the specific identification method.




Inventories




Inventories
are comprised of replacement parts, system components and finished systems,
which are stated at lower of cost or market. Cost is determined on a first-in,
first-out (FIFO) basis.




Property
and Equipment




Property
and equipment are stated at cost and are depreciated using the straight-line
method over their estimated useful lives, generally five to seven years.
Leasehold improvements are amortized over the shorter of the useful life or the
remaining lease term. Upon retirement or other disposition of these assets, the
cost and related accumulated depreciation are removed from the accounts and the
resulting gains or losses are reflected in operations. Expenditures for
maintenance and repairs are charged to operations as incurred. Renewals and
betterments are capitalized.




Impairment
of long-lived asset




Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
the Results of Operations for a Disposal of a Segment of a Business." The
Company periodically evaluates the carrying value of long-lived assets to be
held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair market value of the long-lived assets. Loss on long-lived assets to be
disposed of is determined in a similar manner, except that fair market values
are reduced for the cost of disposal.


8




Basic
and Diluted Net Income per Share




Basic
earnings per share is calculated using the weighted-average number of common
shares outstanding during the period without consideration of the dilutive
effect of stock warrants and convertible notes. Diluted earnings per share is
calculated using the weighted-average number of common shares outstanding during
the period after consideration of the dilutive effect of stock warrants and
convertible notes.




Revenue
recognition




Sales of
products and related costs of products sold are recognized when (i) persuasive
evidence of an arrangement exists, (ii) delivery has occurred, (iii) the price
is fixed or determinable and (iv) collectability is reasonably assured. These
terms are typically met upon shipment of finished goods to the
customer.




Allowance
for doubtful accounts




We
provide an allowance for estimated uncollectible accounts receivable balances
based on historical experience and the aging of the related accounts receivable.
As of March 31, 2009 and September 30, 2008, the Company has reserved $200,000
for doubtful accounts.




Advertising




The
Company expenses advertising costs as incurred. There were no advertising costs
for the periods ended March 31, 2009 and 2008, respectively.




Income
Taxes




The
Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
for Income Taxes.” Deferred taxes are provided on the liability method whereby
deferred tax assets are recognized for deductible temporary differences, and
deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax bases. Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.




Guarantee
Expense




In
accordance with FASB Interpretation No. 45 ("Fin 45"), the Company recognizes,
at the inception of a guarantee, the cost of the fair value of the obligation
undertaken in issuing the guarantee.




Research
and development costs




Expenditures
for research & development are expensed as incurred. Such costs are required
to be expensed until the point that technological feasibility is established.
The Company incurred no research and development costs for the periods ended
March 31, 2009 and September 30, 2008.




Fair
Value of Financial Instruments




The
reported amounts of the Company's financial instruments, including accounts
payable and accrued liabilities, approximate their fair value due to their short
maturities. The carrying amounts of debt approximate fair value since the debt
agreements provide for interest rates that approximate market.




Stock-based
compensation




In
December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No.
123(R), Share-Based Payment. This pronouncement amends SFAS No. 123, Accounting
for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees. SFAS No. 123(R) requires that companies account for
awards of equity instruments issued to employees under the fair value method of
accounting and recognize such amounts in their statements of operations. Under
SFAS No. 123(R), we are required to measure compensation cost for all
stock-based awards at fair value on the date of grant and recognize compensation
expense in our consolidated statements of operations over the service period
that the awards are expected to vest.


9


The
Company accounts for stock-based compensation issued to non-employees and
consultants in accordance with the provisions of SFAS 123(R) and the Emerging
Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for
Equity Instruments that are Issued to Other Than Employees for Acquiring or in
Conjunction with Selling, Goods or Services". Common stock issued to
non-employees in exchange for services is accounted for based on the fair value
of the services received.




Reclassifications




Certain
items in the prior year financial statements have been reclassified for
comparative purposes to conform to the presentation in the current period’s
presentation. These reclassifications have no effect on the previously reported
income (loss).




Recently
Issued Accounting Pronouncements




In May
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally
Accepted Accounting Principles. SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles that are
presented in conformity with generally accepted accounting principles in the
United States. SFAS No. 162 is effective 60 days following the Securities and
Exchange Commission’s approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The Company does not believe SFAS No.
162 will have a material impact on its financial statements.




In March
2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133. SFAS No. 161 changes
the disclosure requirements for derivative instruments and hedging activities.
Entities are required to provide enhanced disclosures about (a) how and why an
entity uses derivative instruments, (b) how derivative instruments and related
hedged items are accounted for under Statement No. 133 and its related
interpretations and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance and cash flows.
SFAS No. 161 is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The Company is currently evaluating the impact SFAS No. 161 may have
on its financial statements.




In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations. SFAS No.
141(R) retains the fundamental requirements in SFAS No. 141, Business
Combinations, that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business combination.
SFAS No. 141(R) requires an acquirer to recognize the assets acquired, the
liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in SFAS No. 141(R). In addition, SFAS No. 141(R) requires
acquisition costs and restructuring costs that the acquirer expected but was not
obligated to incur to be recognized separately from the business combination,
therefore, expensed instead of part of the purchase price allocation. SFAS No.
141(R) will be applied prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. Early adoption is prohibited.
The Company expects to adopt SFAS No. 141(R) to any business combinations with
an acquisition date on or after January 1, 2009.




In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, an amendment to ARB No. 51. SFAS No. 160
changes the accounting and reporting for minority interests, which will be
recharacterized as noncontrolling interests and classified as a component of
equity. SFAS No. 160 is effective for fiscal years, and interim periods within
those fiscal years, beginning on or after December 15, 2008. Early adoption is
prohibited. The Company is currently evaluating the impact SFAS No. 160 may have
on its financial statements.


10




In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities. SFAS No. 159 permits an entity to irrevocably
elect fair value on a contract-by-contract basis as the initial and subsequent
measurement attribute for many financial assets and liabilities and certain
other items including insurance contracts. Entities electing the fair value
option would be required to recognize changes in fair value in earnings and to
expense upfront cost and fees associated with the item for which the fair value
option is elected. SFAS No. 159 is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company
does not expect the adoption of SFAS No. 159 to have a material impact on its
financial condition or results of operations.




Note
4 - Inventory




The
Company values its inventory under the FIFO method of costing under the lower of
cost or market pricing model. The Company reviews its product for old and or
obsolete items and adjusts accordingly. The Company’s inventory consists of
finished and raw material product.




Note
5 - Property and Equipment




At March
31, 2009 and September 30, 2008, property and equipment are comprised of the
following:







March 31,
                  
                  
                  September 30,2009
                  
                  
                  2008Furniture
      and Office Equipment
                  
                  $
                  96,513
                  
                  
                  $
                  96,513Computer
      Software
                  
                  
                  4,550
                  
                  
                  
                  4,550Machinery
      and Equipment
                  
                  
                  68,943
                  
                  
                  
                  151,939Less:
      Accumulated Depreciation
                  
                  
                  (71,782
                  )
                  
                  
                  (72,483
                  )Net
      Property & Equipment
                  
                  $
                  98,224
                  
                  
                  $
                  180,519




Depreciation
for the six months ended March 31, 2009 and 2008 was $14,247 and $7,742,
respectively.




Note 6 – Business Combination and Related
Party Transactions




On April
30, 2007, the Company purchased, though a business combination, all of the
issued and outstanding membership interests of Griffin Filters LLC, (“Griffin”)
a company established since 1971 and engaged in the design, engineering &
supplying of industrial air filtration equipment from its President. Aron Govil,
the Chairman, Chief Executive Officer, Treasurer and President of the Company,
was the owner of 100% of the issued and outstanding membership interests of
Griffin. The Company purchased 100% ownership in Griffin for a purchase price of
$2,750,000.00. The Company completed the Griffin purchase by (i) paying cash of
$700,000, (ii) issuing 20,000,000 shares of common stock valued at $750,000 and
(iii) issuing a four year convertible debenture in the amount of $1,300,000,
paying interest of 8.0% per year and convertible into 30,000,000 shares of
common stock. Griffin had sales and net income of $3,297,409 and $145,981
respectively for fiscal year ended September 30, 2006. Griffin is now a
wholly-owned subsidiary of the Company.


11




The
Company recorded the combination of Griffin Filters, LLC as a “As is Pooling”
because of the related party interest as follows:




Accounts
      Receivable
                  
                  $
                  530,506Inventory
                  
                  
                  49,668Property
      & Equipment, Net
                  
                  
                  67,018Other
      Assets
                  
                  
                  4,225Accounts
      Payable
                  
                  
                  (600,348
                  )Additional
      Paid-in-Capital
                  
                  
                  2,698,931Total
                  
                  $
                  2,750,000




These
consolidated financial statements have been retrospectively adjusted for all
periods presented.




In
addition, the Company had the following related party transactions:




A) Note
payable to a shareholder at March 31, 2009.




B) The
Company, included in accounts receivable an amount due from Ducon Technologies
totaling $225,263, which also represents the sales    to the
Customer for the year. Ducon is an enterprise owned by the majority stockholder
of the Company.




C) The
Company leases space from Ducon Technologies, a related party, on a month to
month basis.




Note
7 – Customer Deposits




The
Company accounts for payments received prior to shipment as a liability and
recognizes revenue when the products are shipped.




A Note
Payable to a shareholder is due within the next year and accrues interest at
5%.




During
the period ended March 31, 2009, the Company repaid the shareholder loan of
$146,030.




Note
9 – Convertible Debenture




On April
30, 2007, the Company issued a $1,300,000 Convertible Debenture to an Officer of
the Company in conjunction with the Purchase of Griffin Filters, LLC. The
debenture carries an 8% annual interest rate with interest payable semi-annually
in arrears on the first business day of January and July each year. The
debenture principle is due and payable on April 30, 2011. Total interest accrued
totaled $199,333 at March 31, 2009 and is included in accrued
expenses.




The
debenture has the right of conversion into non-assessable shares of common stock
of the Company at the market price of common stock at time of conversion.
Conversion is not exercisable prior to December 31, 2008. Commencing December
31, 2008, and continuing to April 30, 2011, the Debenture Holder shall have the
right of conversion subject o the terms and conditions of the debenture. In the
event the face amount of the debenture is not fully converted on or before April
30, 2011, the conversion rights will lapse.




Note
10– Stockholders’ Equity




Preferred
Stock




The
Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par
value. As of March 31, 2009 and September 30, 2008, there were no shares issued
and outstanding.




12




Common
Stock




The
Company is authorized to issue 60,000,000 shares of common stock, $0.001 par
value. As of March 31, 2009 and September 30, 2008, there were 34,327,862 shares
issued and outstanding.




Note
11 – Commitments & Contingencies




Lease
Obligations




The
Company leases its principal office at Farmingdale, New York, 4000 square feet
of office and warehouse/shop space in a single story commercial structure on a
month to month lease from Ducon Technologies Inc., at a monthly rental of
$2,157.




The
Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq. ft. of office
and warehouse space in Liverpool, New York from a third party in a five year
lease at a monthly rent of $4,225 expiring on March 31, 2012.




Legal
Proceedings




The
Company is not currently involved in any lawsuits or litigation.




Note
12 - Income Taxes




In 2008
the Company has a provision for income taxes equal to 40% which has been reduced
in full by net operating loss carry forwards resulting in a zero tax
provision.




Note
13 - Subsequent Events




There are
no material subsequent events.




13


Item
2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations




FORWARD-LOOKING
STATEMENTS




Statements
in this report may be "forward-looking statements." Forward-looking statements
include, but are not limited to, statements that express our intentions,
beliefs, expectations, strategies, predictions or any other statements relating
to our future activities or other future events or conditions. These statements
are based on current expectations, estimates and projections about our business
based, in part, on assumptions made by management. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may, and are likely to, differ materially from what is expressed or
forecasted in the forward-looking statements due to numerous factors, including
those described above and those risks discussed from time to time in this
report, including the risks described under "Risk Factors" in our Form 10 filed
June 19, 2008 and any risks described in any other filings we make with the SEC.
Any forward-looking statements speak only as of the date on which they are made,
and we do not undertake any obligation to update any forward-looking statement
to reflect events or circumstances after the date of this report.




Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses. On an
on-going basis, we evaluate these estimates, including those related to useful
lives of real estate assets, cost reimbursement income, bad debts, impairment,
net lease intangibles, contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. There can be no assurance that actual
results will not differ from those estimates.




OVERVIEW




Cemtrex
Inc. ("Cemtrex" or the "Company") is a Delaware corporation that designs,
engineers, assembles and sells emission monitoring equipment and instruments
through its MIP division to the chemicals,  pulp and paper, steel, power,  coal
and  petrochemical industries,  as  well  as  to municipalities,  hospitals,
and  state  and  federal governments.  Cemtrex also markets technologies for
control of ventilation Air Methane from coal mines and creating energy
efficiency in HVAC systems for commercial buildings and industrial
installations.




The
Company's current emission monitoring products include the
following:




o
            Opacity
      monitor: Compliance & non-compliance
types




o
            Extractive
      Continuous Emission Monitors for sulfur dioxide, nitrogen oxides, oxygen
      and carbon dixoide


14


o
            Ammonia
      Analyzer




o
            Mercury
      Analyzer




o
            Insitu
      Process Analyzers   for carbon dioxide, carbon monoxide, ammonia and
      sulfur dioxide




For the
three month period ended March 31, 2009, we generated revenues of $1,753,662
which is a  decrease of $250,377 from the three month period ended March 31,
2008.  For the three month period ended March 31, 2009, we generated net income
of $121,671.  For the three month period ended March 31, 2008, we had a net
income of $115,569.  For the six month period ended March 31, 2009, we generated
revenues of $3,974,623 which is an increase of $732,149 from the six month
period ended March 31, 2008.  For the six month period ended March 31, 2009, we
generated net income of $231,676.  For the six month period ended March 31,
2008, we had a net income of $246,606.  The following table summarizes these
results:




For the Three Months Ended
                
                
                For The Six Months Ended31-Mar
                
                
                31-Mar2009
                
                
                2008
                
                
                2009Revenues
                
                $
                1,753,662
                
                
                $
                2,004,039
                
                
                $
                3,974,623
                
                
                $
                3,242,474Operating
      Expenses
                
                
                620,558
                
                
                
                616,288
                
                
                
                1,386,250
                
                
                
                1,132,402Net
      Income (Loss)
                
                $
                121,671
                
                
                $
                115,569
                
                
                $
                231,676
                
                
                $
                246,606Income
      (Loss) Per Share-Basic and Diluted
                
                $
                0.00
                
                
                $
                0.00
                
                
                $
                0.01
                
                
                $
                0.01Weighted
      Average Number of Shares
                
                
                34,327,862
                
                
                
                34,327,862
                
                
                
                34,327,862
                
                
                
                34,327,862As
      at
                
                
                
                
                
                
                As
      at31-Mar
                
                
                
                
                
                
                30-Sep2009
                
                
                
                
                
                
                2008Current
      Assets
                
                $
                1,758,239
                
                
                
                
                
                
                $
                2,053,508Total
      Assets
                
                $
                2,090,947
                
                
                
                
                
                
                $
                2,238,252Total
      Liabilities
                
                $
                3,234,520
                
                
                
                
                
                
                $
                3,613,501Total
      Stockholders’ Equity
                
                $
                (1,143,573
                )
                
                
                
                
                
                $
                (1,375,249
                )




On April
27, 1998, the Company was incorporated in the state of Delaware under the name
“Diversified American Holdings, Inc.”  The Company subsequently
changed its name to “Cemtrex Inc.” on December 16, 2004.




15


On April
30, 2007, the Company purchased all of the issued and outstanding membership
interests of Griffin Filters LLC, (“Griffin”) a company established since 1971
and engaged in the design, engineering & supplying of industrial air
filtration equipment from its President.  Arun Govil, the Chairman,
Chief Executive Officer, Treasurer and President of the Company, was the owner
of 100% of the issued and outstanding membership interests of
Griffin.  The Company purchased 100% ownership in Griffin for a
purchase price of $ 2,750,000.00. The Company completed the Griffin purchase by
(i) paying cash of $700,000.00, (ii) issuing 20,000,000 shares of common stock
valued at $750,000.00 and (iii) issuing a four year convertible debenture in the
amount of $1,300,000.00, paying interest of 8.0% per year and convertible into
30,000,000 shares of common stock. Griffin had sales and net income of
$3,297,409 and $145, 981 respectively for fiscal year ended September 30, 2006.
Griffin is now a wholly-owned subsidiary of the Company.




The
Company designs,  engineers, assembles and sells emission monitoring equipment
and instruments to the chemicals,  pulp and paper, steel, power,  coal  and
petrochemical industries,  as  well  as  to municipalities,  hospitals,  and
state  and  federal governments.  Our emission monitoring systems are installed
at the exhaust stacks of industrial facilities and are used to measure the
outlet flue gas concentrations of regulated pollutants, such as sulfur dioxide,
hydrogen chloride, hydrogen sulfide, nitrous oxides, ammonia, nitrogen oxide,
carbon dioxide, carbon monoxide and other regulated pollutants. Through use of
our equipment and instrumentation, our clients can monitor the exhausts to the
atmosphere from their facilities and comply with Environmental Protection Agency
and state and local emission regulations on dust, particulate, fumes, acid gases
and other regulated pollutants into the atmosphere.




The
Company is also involved in providing turnkey services for carbon credit
projects from abatement of greenhouse gases pursuant to Kyoto protocol and
assists project owners in selling of carbon credits globally. Carbon Credits are
emission offsets that are generated from greenhouse gases abatement, renewable
energy such as solar & wind, and energy efficiency projects which displace
carbon emissions from traditional fossil fuel sources like coal, oil or gas with
the subsequent reduction in greenhouse gas emissions. Companies, agencies and
governments buy, sell, bank and trade Carbon Credits called Certified Emission
Reductions or CERs.   Cemtrex provides consulting services for such projects and
arranges for investment equity and the sales of CERs for its customers. Company
also markets technologies for control of ventilation Air Methane from coal mines
and creating energy efficiency in HVAC systems for commercial buildings and
industrial installations.




INDUSTRY
BACKGROUND




The
market for environmental control systems and technologies is directly dependent
upon governmental regulations and their enforcement. During the past three
decades, federal, state and local governments have realized the contaminated air
poses significant threats to public health and safety, and, in response, have
enacted legislation designed to curb emissions of a variety of air
pollutants.  Management believes that the existence of governmental
regulations creates demand for Company’s emission monitoring equipment and
environmental control systems.




16


These
governmental regulations affect nearly every industrial activity. The principal
federal legislation that was created is the Clean Air Act of 1970, as amended
9th Clean Air Act). This legislation requires compliance with ambient air
quality standards and empowers the Environmental Protection Agency (EPA) to
establish and enforce limits on the emissions of various pollutants from
specific types of facilities. The states have primary responsibility for
implementing these standards and, in some cases, have adopted standards more
stringent than those established by the EPA. In 1990, amendments to the Clean
Air Act were adopted which address, among  other things, the country
acid rain problem by imposing strict control on the emissions of sulfur dioxide
from power plants.  During 1997, EPA approved regulations for ozone
related emissions and in 1998 EPA issued regulations requiring utilities in 22
states to significantly reduce Nitrogen oxides emissions.




According
to scientists, the Earth's surface has risen in temperature by about 1 degree
Fahrenheit in the past century. There is increasing evidence that certain human
activities are contributing to this change in temperature through activities
that increase the levels of greenhouse gases, primarily carbon dioxide, methane,
and nitrous oxide, in the atmosphere. Greenhouse gases trap heat that would
normally escape back into the atmosphere, thus increasing the Earth's natural
greenhouse effect and increasing temperature over time.




The
Earth's climate is predicted to change because human activities are altering the
chemical composition of the atmosphere through the buildup of greenhouse
gases—primarily carbon dioxide (CO2), methane
(CH4),
and nitrous oxide (NOx). The
heat-trapping property of these gases is undisputed. Although uncertainty exists
about exactly how Earth's climate responds to these gases, global temperatures
are rising.




EPA
Clean Air market Programs




EPA’s
Clean air market programs include various market-based regulatory programs
designed to improve air quality. Clean air markets include various market-based
regulatory programs designed to improve air quality by reducing outdoor
concentrations of fine particles, sulfur dioxide, nitrogen oxides, mercury,
ozone and other significant air emissions. The most well-known of these programs
are EPA’s Acid Rain
Program and the NOxTrading Programs,
which reduce emissions of sulfur dioxide (SO2) and
nitrogen oxides (NOx)–compounds
produced by fossil fuel combustion.




Acid
Rain Program




The goal
of the Acid Rain Program is to achieve significant environmental and public
health benefits through reductions in emissions of sulfur dioxide (SO2) and
nitrogen oxides (NOx), the
primary causes of acid rain. To achieve this goal at the lowest cost to society,
the program employs both traditional and innovative, market-based approaches for
controlling air pollution. In addition, the program encourages energy efficiency
and pollution prevention.




"Acid
rain" is a broad term referring to a mixture of wet and dry deposition
(deposited material) from the atmosphere containing higher than normal amounts
of nitric and sulfuric acids. The precursors, or chemical forerunners, of acid
rain formation result from both natural sources, such as volcanoes and decaying
vegetation, and man-made sources, primarily emissions of SO2
and NOxresulting from fossil fuel combustion. In the United States, roughly 2/3
of all SO2 and 1/4 of
all NOx come from
electric power generation that relies on burning fossil fuels, like coal. 
Acid rain occurs when these gases react in the atmosphere with water, oxygen,
and other chemicals to form various acidic compounds. The result is a mild
solution of sulfuric acid and nitric acid. When sulfur dioxide and nitrogen
oxides are released from power plants and other sources, prevailing winds blow
these compounds across state and national borders, sometimes over hundreds of
miles.




17




NOx
Trading Program




The goal
of the NOx Trading Program is to reduce the transport of ground-level ozone
across large distances. The Ozone Transport Commission
(OTC) NOxBudget Program was
implemented from 1999 to 2002 and was replaced by the NOxBudget Trading
Program—also known as the “NOx SIP
Call”—in 2003. The NOxSIPCall  Program is a market-based cap and trade program created
to reduce emissions of nitrogen oxides (NOx) from
power plants and other large combustion sources in the eastern United States.
NOx is a prime ingredient in the formation of ground-level ozone (smog), a
pervasive air pollution problem in many areas of the eastern United States. The
NOx
Budget Trading Program was designed to reduce NOx emissions
during the warm summer months, referred to as the ozone season, when
ground-level ozone concentrations are highest.




Clean Air Interstate Rule
(CAIR)




On March
10, 2005, EPA issued the Clean Air Interstate Rule (CAIR). This rule provides
states with a solution to the problem of power plant pollution that drifts from
one state to another. CAIR covers 28 eastern states and the District of
Columbia. The rule uses a cap and trade system to reduce the target
pollutants—sulfur dioxide (SO2) and
nitrogen oxides (NOx)—by 70
percent.




The goal
of the Clean Air Interstate Rule (CAIR) is to permanently cap emissions of
SO2
and NOx in the
eastern U.S. States must achieve the required emission reductions using one of
two compliance options: (1) meet the state’s emission budget by requiring power
plants to participate in an EPA-administered interstate cap and trade system, or
(2) meet an individual state emissions budget through measures of the state’s
choosing.




Clean Air Mercury Rule
(CAMR)




On March
15, 2005, EPA issued the Clean Air Mercury Rule (CAMR) to permanently cap and
reduce mercury emissions from coal-fired power plants for the first time ever.
This rule makes the United States the first country in the world to regulate
mercury emissions from utilities.




The goal
of the Clean Air Mercury Rule (CAMR) is to reduce mercury emissions from
coal-fired power plants through “standards of performance” for new and existing
utilities and a market-based cap and trade program.




CAMR
establishes “standards of performance” limiting mercury emissions from new and
existing coal-fired power plants, and creates a market-based cap and trade
program that will reduce nationwide utility emissions of mercury in two distinct
phases. The first phase cap is 38 tons and emissions will be reduced by taking
advantage of “co-benefit” reductions—that is, mercury reductions achieved by
reducing sulfur dioxide (SO2) and
nitrogen oxides (NOx) emissions
under Clean Air
Interstate Rule (CAIR). In the second phase, due in 2018, coal-fired
power plants will be subject to a second cap, which will reduce emissions to 15
tons upon full implementation.




EPA
Emission Monitoring Requirements




EPA’s
emissions monitoring requirements are designed to ensure the compliance with its
current regulations pursuant to various programs. The emission monitoring
requirements ensure that the emissions data collected is of a known, consistent,
and high quality, and that the mass emissions data from source to source are
collected in an equitable manner. This is essential to support the Clean Air
Markets Program’s mission of promoting market-based trading programs as a means
for solving air quality problems




Continuous
emissions monitoring (CEM) is instrumental in ensuring that the mandated
reductions of SO2, NOxmercury
and other pollutants are achieved. While traditional emissions limitation
programs have required facilities to meet specific emissions rates, the current
Program requires an accounting of each ton of emissions from each regulated
unit. Compliance is then determined through a direct comparison of total
annual  emissions reported by CEM and allowances held for the
unit.




18




CEM is
the continuous measurement of pollutants emitted into the atmosphere in exhaust
gases from combustion or industrial processes. EPA has established requirements
for the continuous monitoring of SO2,
volumetric flow, NOx, diluent
gas, and opacity for units regulated under the Acid Rain Program. In addition,
procedures for monitoring or estimating carbon dioxide (CO2) are
specified. The CEM rule also contains requirements for equipment performance
specifications, certification procedures, and recordkeeping and
reporting.




The Acid
Rain Program uses a market-based approach to reduce SO2 emissions
in a cost-effective manner. (One allowance is an authorization to emit 1 ton of
SO2
during or after a specified calendar year; a utility may buy, sell, or hold
allowances as part of its compliance strategy.) Complete and accurate emissions
data are key to implementing this market-based approach.




An
essential feature of smoothly operating markets is a method for measuring the
commodity being traded. The CEM data supplies the gold standard to back up the
paper currency of emissions allowances. The CEM requirements, therefore,
management believes instills confidence in the market-based approach by
verifying the existence and value of the traded allowance.




The owner
or operator of a unit regulated under the Acid Rain Program must install CEM
systems on the unit unless otherwise specified in the regulation. CEM systems
include:




·
            An
      SO2
      pollutant concentration monitor.


·
            A
      NOx
      pollutant concentration monitor.


·
            A
      volumetric flow monitor.


·
            An
      opacity monitor.


·
            A
      diluent gas (O2 or
      CO2)
      monitor.


·
            A
      computer-based data acquisition and handling system (DAHS) for recording
      and performing calculations with the
data.




All CEM
systems must be in continuous operation and must be able to sample, analyze, and
record data at least every 15 minutes. All emissions and flow data will be
reduced to 1-hour averages. The rule specifies procedures for converting the
hourly emissions data into the appropriate units of measure.




The
following is a summary of monitoring method requirements and
options:




·
            All
      existing coal-fired units serving a generator greater than 25 megawatts
      and all new coal units must use CEMs for SO2,
      NOx,
      flow, and opacity.


·
            Units
      burning natural gas may determine SO2 mass
      emissions by: (1) measuring heat input with a gas flowmeter and using a
      default emission rate; or (2) sampling and analyzing gas daily for sulfur
      and using the volume of gas combusted; or (3) using
  CEMs.


·
            Units
      burning oil may monitor SO2 mass
      emissions by one of the following
methods:


1.
            daily
      manual oil sampling and analysis plus oil flow meter (to continuously
      monitor oil usage)


2.
            sampling
      and analysis of diesel fuel oil as-delivered plus oil flow
      meter


3.
            automatic
      continuous oil sampling plus oil flow
meter


4.
            SO2 and
      flow CEMs.


·
            Gas-fired
      and oil-fired base-loaded units must use NOx
      CEMs.


·
            Gas-fired
      peaking units and oil-fired peaking units may either estimate NOx
      emissions by using site-specific emission correlations and periodic stack
      testing to verify continued representativeness of the correlations, or use
      NOx
      CEMS. The emission correlation method has been significantly streamlined
      in the revised rule.


·
            All
      gas-fired units using natural gas for at least 90 percent of their annual
      heat input and units burning diesel fuel oil are exempt from opacity
      monitoring.


·
            For
      CO2 all
      units can use either (1) a mass balance estimation, or (2) CO2
      CEMs, or (3) O2 CEMs
      in order to estimate CO2
      emissions.


19


PRODUCTS




The
Company offers a range of products and systems, incorporating diverse
technologies, to address the needs of a wide variety of industries and their
environmental regulations. Management believes that the Company provides a
single source responsibility for design, engineering, assembly, installation and
maintenance of systems to its customers. The Company’s products are designed to
operate so as to allow its users to determine their compliance with the latest
governmental emissions regulations.  The Company’s products measure
the concentrations of various regulated pollutants in the flue gases discharging
the exhaust stacks at various utilities and industries.




The
Company's current products include the following:




Opacity
monitor: Compliance & non-compliance types




Management
believes that the Company’s Laser Opacity monitor provides the highest accuracy
and long-term reliability available for stack opacity and dust
measurements.  An EPA-compliant monitoring system, the monitor is a
lightweight, efficient solution for determining opacity or dust concentration in
stack gases.  Proven in many installations worldwide, it advances the
state of opacity monitoring with higher levels of accuracy, flexible
installation and reduced long-term maintenance




Extractive
Continuous Emission Monitors (CEMS)




Cemtrex
provides direct-extractive and dilution-extractive CEMS  equipment
& systems that are applicable for utilities, industrial boilers, FGD
systems, SCR-NOx control, furnaces, gas turbines, process heaters, incinerators,
and process controls.  In addition to traditional CEMS designed for
maximum reliability and minimal maintenance in monitoring criteria pollutants,
the Company can also accurately quantify other gaseous compounds through in-situ
or extractive FTIR systems. The Company’s Extractive CEMS can be configured to
monitor for one or all of the following: • NOx • SO2 • CO2 • O2 • CO • THC •
Mercury • H2S • HCl & HF Acid • NH3 • Particulate • Opacity • Volumetric
Flow and Moisture.




Ammonia
Analyzer




The flue
gas stream which contain ammonia, nitrogen oxides and in some cases sulfur
dioxide utilize Ultra Violet radiation techniques for measurements. All these
components absorb UV radiation, and therefore can be monitored by process
analyzers that utilize UV absorbance techniques for detection.




20


Mercury
Analyzer




The EPA
Clean Air Mercury rule requires that all coal fired power plants must provide
continuous mercury monitoring by 2009. Management believes that Cemtrex's SM4
mercury monitor, a result of 10 years experience in mercury monitoring business,
provides reliable online measurements at a much lower cost than any other
competing model in the market. Cemtrex SM4 is the first instrument working on a
thermo catalytic principle avoiding wet chemical sample treatment. As a
consequence, the Company has found that maintenance demand has been drastically
minimized. We believe that it is the only monitor that required no maintenance
at a coal fired utility wet stack, no carrier gases, no water and 95% data
availabilitySM4 uses straight extractive Teflon sheathed Hastelloy probe with no
plugging or corrosion.




Company
also markets technologies and systems for control of ventilation Air Methane
from coal mines and creating energy efficiency in HVAC systems for commercial
buildings and industrial installations.




PRODUCT
DEVELOPMENT




The
Company is currently in the process of developing technology for economically
controlling carbon dioxide emissions from power plant flue gases that already
have installed wet limestone scrubbers utilizing a proprietary
chemical.




The
Company is not dependent on, nor expects to become dependent on, any one or a
limited number of suppliers.  The Company buys parts and components to
assemble its equipment and products. The Company does not manufacture or
fabricate its own products or systems.  The Company relies on
sub-suppliers and third party vendors to procure from or fabricate its
components based on its design, engineering and specifications. The Company also
enters into subcontracts for field installation, which the Company supervises;
and Company manages all technical, physical and commercial aspects of the
performance of the Company contracts. To date, the Company has not experienced
difficulties either in obtaining fabricated components and other materials and
parts or in obtaining qualified subcontractors for installation
work.




PARTS,
REPAIR AND REFURBISHMENT SERVICES




The
Company also provide  replacement  and
spare  parts  and  repair  and  refurbishment
services for our emission monitoring systems following the expiration of our
warranties  which  generally range up to  12
months. The Company has experienced only minimal costs from its
warranties.




The
Company’s standard terms of sale disclaim any liability for consequential or
indirect losses or damages stemming from any failure of our products or systems
or any component thereof.  The Company seeks indemnification from its
subcontractors for any loss, damage or claim arising from the subcontractors'
failure to perform.




21


COMPETITION




The
Company faces substantial competition in each of its principal
markets.  Most of its competitors are larger and have greater
financial resources than the Company; several are divisions of multi-national
companies. The Company competes on the basis of price, engineering and
technological expertise, know-how and the quality of our products, systems and
services.  Additionally, the Company’s management believes that the
successful performance of the Company’s installed products and systems is a key
factor in gaining business as customers typically prefer to make significant
purchases from a company with a solid performance history.




We obtain
virtually all our contracts through competitive bidding. Although price is an
important factor and may in some cases be the
governing  factor,  it is not always determinative, and
contracts are often awarded on the basis of the
efficiency  or  reliability  of  products  and  the  engineering  and  technical
expertise of the bidder.  Several companies market products that compete
directly with our products.  Other companies offer products that
potential customers may consider to be acceptable alternatives to our products
and services.  We face direct competition from companies with far
greater financial, technological, manufacturing and personnel resources,
including Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech
Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions
monitoring business.




INTELLECTUAL
PROPERTY




Over the
years, the Company has developed proprietary technologies that give us an edge
in competing with its competitors. Thus, the Company relies on a combination of
trade secrets and know-how to protect its intellectual property. The Company has
not filed any patents.




MARKETING




The
Company relies on manufacturing representatives, distributors, direct
salespersons, magazine advertisements, internet advertising, trade shows, trade
directories and catalogue listings to market our products and services. The
Company uses more than eight manufacturing sales representatives in the United
States backed by our senior management and technical professionals. The
Company’s arrangements with independent sales representatives accord each a
defined territory within which to sell some or all of
our  products  and  systems,  provide  for
the payment of  agreed-upon  sales
commissions  and
are  terminable  at  will.  The
Company’s sales representatives do not have authority to execute contracts on
the Company’s behalf.




The
Company’s sales representatives also serve as ongoing liaison function between
us and our customers during the installation phase of our products and systems
and address customers' questions or concerns arising thereafter. The Company
selects representatives based upon industry reputation, prior sales performance
including number of prospective leads generated and sales closure rates, and the
breadth of territorial coverage, among other criteria.




22


Technical
inquiries received from potential customers are referred to our engineering
personnel. Thereafter, the Company’s sales and engineering personnel jointly
prepare a budget for future planning, a proposal, or a final bid.  The period
between initial customer contact and issuance of an order is generally between
two and twelve months.




CUSTOMERS




The
Company’s principal customers are engaged in refining, power, chemical, mining
and metallurgical processing.  Historically,  most  of our customers  have
purchased  individual  products  or  systems  which,  in  many instances,
operate in conjunction with products and systems supplied by others. For several
years, the Company has marketed its products as integrated custom engineered
emission monitoring systems and environmental management solutions. No one
single customer accounts for a large percentage of our annual
sales.




On most
projects, the Company is responsible to its customers for all phases of the
design, assembly, supply and, if included, field installation of its products
and systems. The successful completion of a project is generally determined by a
successful operational test of the supplied equipment conducted by our field
service technician in the presence of the customer.




TECHNOLOGY




The
Company has developed a broad range of emission monitoring technological base.
The Company’s equipment and instruments are used: (i) to measure particulate,
carbon dioxide, nitrogen oxides, mercury and sulfur dioxide from coal-fired
power plants, (ii) to measure particulate from cement plants, (iii) to measure
hydrocarbons, particulate and sulfur dioxide from refineries, (iv) to measure
hydrogen sulfide, carbon monoxide, ammonia, hydrocarbons and other regulated
pollutants from chemical plants, steel plants, incinerators and other industrial
exhausts. Our emission monitors are capable of meeting all current federal and
local emission monitoring standards.  Company also markets technologies for
control of ventilation Air Methane from coal mines and creating energy
efficiency in HVAC systems through monitoring of carbon dioxide for commercial
buildings and industrial installations.  The Company has not filed any patents
with respect to its technology.




BONDING
AND INSURANCE




While
only a very few of our contracts require the Company to procure bid and
performance bonds, such requirements are prevalent for large projects or
projects  partially or fully funded by federal, state or local governments. A
bid bond guarantees that a bidder will execute a contract if it is awarded the
job and a performance bond guarantees performance of the contract.  The Company
does not presently have a bank credit line to back bid or performance bonds.
Thus, the Company cannot bid on certain contracts.




23


In
certain cases, the Company is able to secure large contracts by accepting
progress payments with retention provisions in lieu of bonds.




The
Company currently maintains different types of insurance, including general
liability and property coverage.  The Company does not maintain product
liability insurance with respect to its products and equipment.  Management
believes that the insurance coverage that it is adequate for our current
business needs.




GOVERNMENT
REGULATION




Significant
environmental laws, particularly the Federal Clean Air Act, have been enacted in
response to public concern about the environment.  The Company believe that
compliance with and enforcement of these laws and  regulations create the demand
for our products and systems and largely determine  the level of  expenditures
that  customers  will  make  to  monitor the  emissions  from  their facilities.
The Federal Clean Air Act, initially adopted in 1970 and extensively amended in
1990, requires compliance with ambient air quality standards and empowers the
EPA to establish and enforce limits on the emission of various pollutants from
specific types of industrial facilities.  States have primary responsibility for
implementing these standards, and, in some cases, have adopted more stringent
standards.




The 1990
amendments  to the  Federal  Clean Air Act  require, among other matters,
reductions in the emission of sulfur oxides, believed to be the cause of "acid
rain," in the emission of 189 identified  hazardous air pollutants and toxic
substances  and the  installation  of  equipment  and systems  which will
contain certain named toxic substances used in industrial processes in the event
of  sudden,  accidental,  high-volume  releases.  Such  amendments  also  extend
regulatory coverage to many facilities previously exempt due to their small size
and  require  the EPA to  identify  those  industries  which will be required to
install the mandated control  technology for the industry to reduce the emission
of hazardous air pollutants from their  respective  plants and  facilities.  The
Montreal Protocol, adopted in 1987, as well as EPA regulations issued in 1992,
call for the phase-out of CFCs. In addition,  regulations promulgated by the EPA
in 1993  further  limit  the  concentration  of  pollutants,  such  as  hydrogen
chloride, sulfur dioxide,  chlorine, heavy metals and hazardous solid substances
in the form of extremely  fine dust,  from sewage  sludge  incinerators.  Sewage
sludge facilities are required to comply with these regulations. Compliance with
all these regulations can only be achieved by first monitoring the pertinent
emission levels.




EMPLOYEES




The
Company employs 21 full time and three part time employees, consisting of four
executive officers, five managers, ten technical engineers, and five clerical
and administrative support persons.  None of our employees are represented by a
labor union. In addition, the Company utilizes commission sales personnel and
contract design engineers, on an as needed basis. There are no employment
agreements.




24


FACILITIES




The
Company does not own any real estate.




The
Company leases its principal office at Farmingdale, New York, 4000 square feet
of office and warehouse/shop space in a single story commercial structure on a
month to month lease from Ducon Technologies Inc., at a monthly rental of
2,157.00. The Company’s subsidiary Griffin Filters LLC leases approx. 10,000 sq.
ft. of office and warehouse space in Liverpool, New York from a third party in a
five year lease at a monthly rent of $ 4,225.00 expiring on March 30, 2012.  The
Company has no plans to acquire any property in the immediate future. The
Company believes that its current facilities are adequate for its needs through
the next six months, and that, should it be needed, suitable additional space
will be available to accommodate expansion of the Company's operations on
commercially reasonable terms, although there can be no assurance in this
regard. There are no written agreements.




FINANCIAL
CONDITION




The
following table sets forth selected historical consolidated financial data from
our consolidated financial statements and should be read in conjunction with our
consolidated financial statements including the related notes and this
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” section hereof.




For the Three Months Ended
                
                
                For The Six Months Ended31-Mar
                
                
                31-Mar2009
                
                
                2008
                
                
                2009Revenues
                
                $
                1,753,662
                
                
                $
                2,004,039
                
                
                $
                3,974,623
                
                
                $
                3,242,474Operating
      Expenses
                
                
                620,558
                
                
                
                616,288
                
                
                
                1,386,250
                
                
                
                1,132,402Net
      Income (Loss)
                
                $
                121,671
                
                
                $
                115,569
                
                
                $
                231,676
                
                
                $
                246,606Income
      (Loss) Per Share-Basic and Diluted
                
                $
                0.00
                
                
                $
                0.00
                
                
                $
                0.01
                
                
                $
                0.01Weighted
      Average Number of Shares
                
                
                34,327,862
                
                
                
                34,327,862
                
                
                
                34,327,862
                
                
                
                34,327,862As
      at
                
                
                
                
                
                
                As
      at31-Mar
                
                
                
                
                
                
                30-Sep2009
                
                
                
                
                
                
                2008Current
      Assets
                
                $
                1,758,239
                
                
                
                
                
                
                $
                2,053,508Total
      Assets
                
                $
                2,090,947
                
                
                
                
                
                
                $
                2,238,252Total
      Liabilities
                
                $
                3,234,520
                
                
                
                
                
                
                $
                3,613,501Total
      Stockholders’ Equity
                
                $
                (1,143,573
                )
                
                
                
                
                
                $
                (1,375,249
                )




25




CRITICAL
ACCOUNTING POLICIES AND ESTIMATES




The
following discussion and analysis is based upon our consolidated financial
statements which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of our
financial statements requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses, and assets and liabilities
during the periods reported. Estimates are used when accounting for certain
items such as revenues, allowances for returns, early payment discounts,
customer discounts, doubtful accounts, employee compensation programs,
depreciation and amortization periods, taxes, inventory values,  and
valuations of investments, goodwill, other intangible assets and long-lived
assets. We base our estimates on historical experience, where applicable and
other assumptions that we believe are reasonable under the circumstances. Actual
results may differ from our estimates under different assumptions or conditions.
We believe that the following critical accounting policies affect our more
significant judgments and estimates used in preparation of our consolidated
financial statements.




We
maintain allowances for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments. We base our estimates
on the aging of our accounts receivable balances and our historical write-off
experience, net of recoveries.




We value
our inventories at the lower of cost or market. We write down inventory balances
for estimated obsolescence or unmarketable inventory equal to the difference
between the cost of the inventory and the estimated market value based upon
assumptions about future demand and market conditions.




Goodwill
is reviewed for possible impairment at least annually or more frequently upon
the occurrence of an event or when circumstances indicate that the Company’s
carrying amount is greater than the fair value. In accordance with SFAS 142, the
Company examined goodwill for impairment and determined that the Company’s
carrying amount did not exceed the fair value, thus, there was no
impairment.




Generally,
sales are recognized when shipments are made to customers. Rebates, allowances
for damaged goods and other advertising and marketing program rebates are
accrued pursuant to contractual provisions and included in accrued expenses.
Certain amount of our revenues fall under the percentage-of-completion method of
accounting used for long-term contracts. Under this method, sales and gross
profit are recognized as work is performed based on the relationship between
actual costs incurred and total estimated costs at completion. Sales and gross
profit are adjusted prospectively for revisions in estimated total contract
costs and contract values. Estimated losses are recorded when
identified.




26


RESULTS
OF OPERATIONS




Net Sales:Net sales
      for three months ended March 31, 2009 decreased by $250,377 or 14.3%, to
      $1,753,662 from $2,004,039 for the three months ended March 31,
      2008.   Net sales for six months ended March 31, 2009
      increased by $732,149 or 18.4%, to $3,974,623 from $3,242,474 for the six
      months ended March 31, 2008.   Sales growth decreased
      during the three month period ended March 31, 2009 primarily due to the
      general slowdown in the economic activity and the sales increase in six
      month period was primarily due to the shipment of sales orders in the
      first quarter ending December 31, 2008.Gross Profit: Gross
      profit for the three months ended March 31, 2009 increased $30,731 or
      3.9%, to $822,644 which made up 46.9% of net sales, from $791,913 for the
      three months ended March 31, 2008, which made up 39.5% of net sales. The
      higher gross margin in the three months ended March 31, 2009 was a direct
      result of the higher margin product mix shipped during this period. Gross
      profit for the six months ended March 31, 2009 increased $257,958 or
      17.6%, to $1,728,087 which made up 43.5% of net sales, from $1,470,129 for
      the six months ended March 31, 2008, which made up 45.3% of net sales. The
      lower gross margin in the six months ended March 31, 2009 was a direct
      result of the lower margin product mix shipped during this
      period.Operating Expenses:Operating expenses for the three months ended March 31, 2009
      increased $4,270, or 0.7%, to $620,558 from $616,288 for the three months
      ended March 31, 2008. Operating expenses as a percentage of sales
      increased in the three month period ended March 31, 2009 to 35.3% from
      30.8% in the three month period ended March 31, 2008. The increase in
      operating expenses percentage was primarily due to lower sales level
      during the three month period as compared to last
      year.   Operating expenses for the six months ended March
      31, 2009 increased $253,848, or 22.4%, to $1,386,250 from $1,132,402 for
      the six months ended March 31, 2008. Operating expenses as a percentage of
      sales remained the same in the six month period ended March 31, 2009 to
      34.9% from 34.9% in the six month period ended March 31,
    2008.Net Income/Loss:The
      Company had net income of $121,671 which was 6.9% of net sales, for the
      three month period ended March 31, 2009 as compared to a net income of
      $115,569, which was 5.8% of net sales, for the three month period ended
      March 31, 2008. The higher net income percentage in the current quarter as
      compared to the previous quarter a year ago was a result of higher gross
      margin and lower sales. The Company had net income of $231,676 which was
      5.8% of net sales, for the six month period ended March 31, 2009 as
      compared to a net income of $246,606, which was 7.6% of net sales, for the
      six month period ended March 31, 2008. The higher net income percentage in
      the previous six month period as compared to the current one was a result
      of higher gross margins during that period.Provision for Income Taxes:Our effective state and federal tax rate, adjusted for the effect
      of certain credits and adjustments, was approximately 38% and 38% for 2009
      and 2008, respectively.




EFFECTS
OF INFLATION




The
Company’s business and operations have not been materially affected by inflation
during the periods for which financial information is presented.




LIQUIDITY
AND CAPITAL RESOURCES




Working
capital was ($176,281) at March 31, 2009, compared to ($259,993) at September
30, 2008. This included cash and cash equivalents of $54,998 at March 31, 2009
and $60,610 at September 30, 2008, respectively. The reason for the increase in
working capital was due to profitability of operations during this
period.




Trade
receivables decreased $271,914 or 17.8% at March 31, 2009 to $1,256,317 at March
31, 2009 from $1,528,231 at September 30, 2008. The decrease in accounts
receivable is attributable to timing of order shipments and receipt of payments
from customers.




Inventories
decreased $18,773 or 4.1% to $437,794 at March 31, 2009 from $456,567 at
September 30, 2008.  The decrease inventory was due to timing of order
shipment and receipt of fresh inventories.


27




Continuing
operations generated $72,370 of cash for the six months ended March 31, 2009,
compared to $19,671 of cash for the six months ended March 31,
2008.  The increase in cash flows was primarily related to payments of
account payable and collection of account receivables
timing.   Investing activities for continuing operations
generated $68,048 of cash during the six months ended March 31, 2009, compared
to use of $151,938 cash during the three months ended March 31, 2008. The
generation of cash by investing activities during the current period was
primarily attributable to the sale of some equipment.   The
financing activities during the six months ended March 31, 2009 used up $146,030
in cash from repayment of loans to shareholder and provided $178,648 in cash for
the six month period ended March 31, 2008 from loan proceeds.




We
believe that our cash on hand, cash generated by operations, is sufficient to
meet the capital demands of our current operations during the 2009 fiscal year.
Any major increases in sales, particularly in new products, may require
substantial capital investment. Failure to obtain sufficient capital could
materially adversely impact our growth potential.




Outlook




We
anticipate that the outlook for our products and services remains quite strong
and we are positioned well to take advantage of it.




We
believe there is currently a gradually increasing public awareness of the issues
surrounding air quality and that this trend will continue for the next several
years. We also believe there is an increase in public concern regarding the
effects of air quality on society and future generations, as well as an increase
in interest by standards-making bodies in creating specifications and techniques
for detecting, defining and solving air quality problems. As a result, we
believe there will be an increase in interest in our mercury monitors, opacity
monitors, carbon credits and air filtration products of subsidiary Griffin
Filters.




President
Obama has promised to invest $150bn over 10 years in renewable energy and
environmental control technologies as part of a wider plan to increase US energy
security amid fear of oil shortages, while also reducing the country’s carbon
emissions in a bid to tackle global warming - and create jobs during an economic
downturn. A report from a leading US-based research firm predicts that while the
global carbon market will contract 29 per cent this year to just $84bn, it will
recover quickly over the next four years, growing at an average of 68 per cent a
year to be worth $669bn by 2013. According to official budget figures
released by the Obama administration earlier this year, it expects to raise
$646bn between 2012 and 2019 for the US treasury through the auctioning of
carbon allowances.




This
Outlook section, and other portions of this document, include certain
“forward-looking statements” within the meaning of that term in Section 27A of
the Securities Act of 1933, and Section 21E of the Securities Exchange Act of
1934, including, among others, those statements preceded by, following or
including the words “believe,” “expect,” “intend,” “anticipate” or similar
expressions. These forward-looking statements are based largely on the current
expectations of management and are subject to a number of assumptions, risks and
uncertainties. Our actual results could differ materially from these
forward-looking statements. Important factors to consider in evaluating such
forward-looking statements include those discussed in “Risk Factors” as well
as:




•
            the
      shortage of reliable market data regarding the emission monitoring &
      air filtration market,




•
            changes
      in external competitive market factors or in our internal budgeting
      process which might impact trends in our results of
      operations,




•
            anticipated
      working capital or other cash
requirements,


28




•
            changes
      in our business strategy or an inability to execute our strategy due to
      unanticipated changes in the
market,




•
            product
      obsolescence due to the development of new technologies,
    and




•
            Various
      competitive factors that may prevent us from competing successfully in the
      marketplace.




In light
of these risks and uncertainties, there can be no assurance that the events
contemplated by the forward-looking statements contained in this Form 10QSB will
in fact occur.




Item
3. Quantitative & Qualitative Disclosures about Market Risks




Not
applicable.




Item
4(T). Controls and Procedures




(a)
            Evaluation
      of Disclosure and Procedures




We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of March 31, 2008. This evaluation was carried out
under the supervision and with the participation of our President (Chief
Executive Officer), Arun Govil and our Vice President of Finance, Renato Dela
Rama. Based upon that evaluation, our Chief Executive Officer and Vice President
of Finance concluded that, as of March 31, 2008, our disclosure controls and
procedures were and concluded that it is effective as of such date. Any internal
control system, no matter how well designed, will have inherent limitations.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.




Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Vice President of Finance,
to allow timely decisions regarding required disclosure.




(b)  Changes
in Internal Controls over financial reporting




There
have been no changes in our internal controls over financial reporting during
our last fiscal quarter, which has materially affected, or is reasonably likely
to materially affect, our internal control over financial
reporting.




29


Part II Other
Information




Item
1. Legal Proceedings




The
Company is not currently a party to any threatened or pending legal proceedings,
other than incidental litigation arising in the ordinary course of
business.  In the opinion of management, the ultimate disposition of these
matters will not have a material adverse effect on the Company’s consolidated
financial position, results of operations or cash flows.




Item
1A Risk Factors




RISKS
RELATED TO OUR BUSINESS





RISK
FACTORS




An
Investment in our common stock involves risks. You should carefully consider the
following risks, as well as the other information contained in this quarterly
report. If any of the following risks actually occur, our business could be
materially harmed.




o    We
are substantially dependent upon the success and market acceptance of our
technology. The failure of the emissions monitoring and controls market to
develop as we anticipate, would adversely affect our business.




The
Company's success is largely dependent on increased market acceptance of our
emission monitoring equipment and control systems. . If acceptance of emissions
monitoring equipment does not continue to grow, then the Company’s revenues may
be significantly reduced.




oIf
we are unable to develop new products, our competitors may develop and market
products with better features that may reduce demand for our potential products.
The Company may not be able to introduce any new products or any enhancements to
its existing products on a timely basis, or at all.  In addition, the
introduction by the Company of any new products could adversely affect the sales
of certain of its existing products. If the Company's competitors develop
innovative emissions testing technology that are superior to the Company's
products or if the Company fails to accurately anticipate market trends and
respond on a timely basis with its own innovations, the Company may not achieve
sufficient growth in its revenues to attain profitability.




oWe
have incurred losses for the fiscal year ending September 30, 2007, and we may
incur losses for the foreseeable future.


We had
net loss of $123,565 for the fiscal year ended September 30, 2007. These losses
have resulted principally from expenses incurred in the extensive demonstration
testing of its new SM4 compliance mercury monitors at various utility sites and
the low gross margin product line of Griffin Filters. We may continue to incur
significant expenditures related to research and development, selling and
marketing and general and administrative activities as well as capital
expenditures and anticipate that our expenses and losses may increase in the
foreseeable future as we expand our business; however, for the year ended
September 30, 2008 and the six month period ended March 31, 2009, we generated a
net profit of $118,078 and $286,091, respectively,.  Further, as a
public company we will also incur significant legal, accounting and other
expenses that we did not incur as a private company. To achieve sustained
profitability, we will need to generate significant additional revenues with
significantly improved gross margins. It is uncertain when, if ever, we will
return to profitability.  We might not be able to sustain or
increase profitability on a quarterly or annual basis.


oThe
Company faces constant changes in governmental standards by which our products
are evaluated.




The
Company believes that, due to the constant focus on the environment and clean
air standards throughout the world, a requirement in the future to adhere to new
and more stringent regulations both domestically and abroad is possible as
governmental agencies seek to improve standards required for certification of
products intended to promote clean air.  In the event our products
fail to meet these ever-changing standards, some or all of our products may
become obsolete.


30


oThe
future growth of our business depends, in part, on enforcement of existing
emissions-related environmental regulations and further tightening of emission
standards worldwide.




The
Company expects that the future business growth will be driven, in part, by the
enforcement of existing emissions-related environmental regulations and
tightening of emissions standards worldwide.  If such standards do not
continue to become stricter or are loosened or are not enforced by governmental
authorities, it could have a material adverse effect on our business, operating
results, financial condition and long-term prospects.




o We may incur
substantial costs enforcing our proprietary information, defending against
third-party patents, invalidating third-party patents or licensing third-party
intellectual property, as a result of litigation or other proceedings relating
to patent and other intellectual property rights.




The
Company considers its technology and procedures proprietary.  In
particular, the Company depends substantially on its flexibility to develop
custom engineered solutions for various applications and be responsive to
customer needs.  The Company has not filed for any patents for its
technologies.




The
Company may be notified of claims that it has infringed a third party's
intellectual property.  Even if such claims are not valid, they could
subject the Company to significant costs. In addition, it may be necessary in
the future to enforce the Company's intellectual property rights to determine
the validity and scope of the proprietary rights of others. Litigation may also
be necessary to defend against claims of infringement or invalidity by
others.  An adverse outcome in litigation or any similar proceedings
could force the Company to take actions that could harm its business. These
include: (i) ceasing to sell products that contain allegedly infringing
property; (ii) obtaining licenses to the relevant intellectual property which
the Company may not be able to obtain on terms that are acceptable, or at all;
(iii) indemnifying certain customers or strategic partners if it is determined
that the Company has infringed upon or misappropriated another party's
intellectual property; and (iv) redesigning products that embody allegedly
infringing intellectual property. Any of these results could adversely affect
the Company's business, financial condition and results of operations. In
addition, the cost of defending or asserting any intellectual property claim,
both in legal fees and expenses, and the diversion of management resources,
regardless of whether the claim is valid, could be significant.




o    Product
defects could cause the Company to incur significant product liability,
warranty, repair and support costs and damage its reputation which would have a
material adverse effect on its business.




Although
the Company rigorously tests its products, defects may be discovered in future
or existing products. These defects could cause the Company to incur significant
warranty, support and repair costs and divert the attention of its research and
development personnel. It could also significantly damage the Company's
reputation and relationship with its distributors and customers which would
adversely affect its business. In addition, such defects could result in
personal injury or financial or other damages to customers who may seek damages
with respect to such losses. A product liability claim against the Company, even
if unsuccessful, would likely be time consuming and costly to
defend.




o    The
markets in which we operate are highly competitive, and many of our competitors
have significantly greater resources than we do.




There is
significant competition among companies that provide emissions monitoring
systems.  Several companies market products that compete directly with
our products.  Other companies offer products that potential customers
may consider to be acceptable alternatives to our products and
services.  We face direct competition from companies with far greater
financial, technological, manufacturing and personnel resources, including
Thermo Fisher Scientific Inc., Tekran Instruments Corporation, Altech
Environment USA, Shaw Group, and Horiba Instruments Inc. in the emissions
monitoring business. Newly developed products could be more effective and cost
efficient than our current or future products.  Many of the current
and potential future competitors have substantially more engineering, sales and
marketing capabilities and broader product lines than we have.


31


o    The
Company’s results may fluctuate due to certain regulatory, marketing and
competitive factors over which we have little or no control.




The
factors listed below, some of which we cannot control, may cause our revenue and
results of operations to fluctuate significantly:




·
            the
      existence and enforcement of government environmental regulations. If
      these regulations are not maintained or enforced then the market for
      Company’s products could
deteriorate;


·
            Retaining
      and keeping qualified employees and management
  personnel;


·
            Ability
      to upgrade our products to keep up with the changing market place
      requirements;


·
            Ability
      to keep up with our competitors who have much higher resources than
      us;


·
            Ability
      to find sub suppliers and sub contractors to assemble and install our
      products;


·
            General
      economic conditions of the industry and the ability of potential customers
      to spend money on setting up new industries that require our
      products;


·
            Ability  to  maintain
      or raise  adequate working capital  required for the
      operations and future growth; and


·
            Ability
      to retain our CEO and other senior key
  personnel.




o   The
loss of our senior management and failure to attract and retain qualified
personnel in a competitive labor market could limit our ability to execute our
growth strategy, resulting a slower rate of growth.




We depend
on the continued service of our senior management. Due to the nature of our
business, we may have difficulty locating and hiring qualified personnel and
retaining such personnel once hired. The loss of the services of any of our key
personnel, or our failure to attract and retain other qualified and experienced
personnel on acceptable terms, could limit our ability to execute our growth
strategy resulting in a slower rate of growth.




o    General
economic downturns in general would have a material adverse effect on the
Company's business, operating results and financial condition.




The
Company's operations may in the future experience substantial fluctuations from
period to period as a consequence of general economic conditions affecting
consumer spending. Therefore, any economic downturns in general would have a
material adverse effect on the Company's business, operating results and
financial condition.




o    A
demand for payment of the outstanding loan or the conversion into non-assessable
share of common stock of the Company may have an adverse effect on the
Company.




On April
30, 2007, the Company issued a $1,300,000 Convertible Debenture to Arun Govil,
the Company’s Chairman, CEO, President and Treasurer, in conjunction with the
purchase of Griffin Filters, Inc. pursuant to the Agreement and Assignment of
Membership Interests between Arun Govil and Cemtrex, Inc. The debenture carries
an 8% annual interest rate with interest payable semiannually in arrears on the
first business day of January and July each year. The debenture principle is due
and payable on April 30, 2011.




The
debenture has the right of conversion into 30,000,000 non-assessable shares of
common stock of the Company at $0.001 (par value) per share. Conversion is not
exercisable prior to December 31, 2007. Commencing December 31, 2007 and
continuing to April 30, 2011, the Debenture Holder shall have the right of
conversion subject o the terms and conditions of the debenture. In the event the
face amount of the debenture is not fully converted on or before April 30, 2011,
the conversion rights will lapse.




Risks
related to investment in the common stock of the Company




o We may
need additional funds in the future. We may be unable to obtain additional funds
or if we obtain financing it may not be on terms favorable to us. You may lose
your entire investment.


32


Based on
our current plans, we believe our existing cash and cash equivalents along with
cash generated from operations will be sufficient to fund our operating expenses
and capital requirements through December 31, 2008, although there is no
assurance of this result, we may need funds in the future. If our capital
resources are insufficient to meet future capital requirements, we will have to
raise additional funds. If we are unable to obtain additional funds on terms
favorable to us, we may be required to cease or reduce our operating
activities.




o If we
raise additional funds by selling additional shares of our capital stock, the
ownership interests of our stockholders will be diluted.




o Our
stock trades on the Over the Counter Bulletin Board (OTCBB) electronic quotation
system.




The
Company’s Common Stock currently trades on the Over the Counter Bulletin Board
(OTCBB) electronic quotation system under the symbol “CTEI.OB”. The OTCBB is a
decentralized market regulated by the Financial Industry Regulatory Authority in
which securities are traded via an electronic quotation system.  There
can be no assurance that a trading market for the Company's shares will continue
to exist in the future, and there can be no assurance that an active trading
market will develop or be sustained. The market price of the shares of Common
Stock is likely to be highly volatile and may be significantly affected by
factors such as actual or anticipated fluctuations in the Company's operating
results, announcements of technological innovations, new products or new
contracts by the Company or its competitors, developments with respect to
proprietary rights, adoption of new government regulations affecting the
environment, general market conditions and other factors. In addition, the stock
market has from time to time experienced significant price and volume
fluctuations that have particularly affected the market price for the common
stocks of technology companies. These types of broad market fluctuations may
adversely affect the market price of the Company's common stock. SeeRisk Factor “Our stock
price may be highly volatile” below.





o  Our
shares of common stock are thinly traded, so stockholders may be unable to sell
at or near ask prices or at all if they need to sell shares to raise money or
otherwise desire to liquidate their shares.




Our
common stock has from time to time been “thinly-traded,” meaning that the number
of persons interested in purchasing our common stock at or near ask prices at
any given time may be relatively small or non-existent. This situation is
attributable to a number of factors, including the fact that we are a small
company that is relatively unknown to stock analysts, stock brokers,
institutional investors and others in the investment community that generate or
influence sales volume, and that even if we came to the attention of such
persons, they tend to be risk-averse and would be reluctant to follow an
unproven company such as ours or purchase or recommend the purchase of our
shares until such time as we become more seasoned and viable. As a consequence,
there may be periods of several days or more when trading activity in our shares
is minimal or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support continuous
sales without an adverse effect on share price. We cannot give stockholders any
assurance that a broader or more active public trading market for our common
shares will develop or be sustained, or that current trading levels will be
sustained.




o Our
common stock will be subject to “penny stock” rules which may be detrimental to
investors.




If our
common stock is not listed on a national exchange or market, the trading market
for our common stock may become illiquid. Our common stock trades on the
over-the-counter electronic bulletin board and, therefore, is subject to the
requirements of certain rules promulgated under the Securities Exchange Act of
1934, which require additional disclosure by broker-dealers in connection with
any trades involving a stock defined as a "penny stock".  The
Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) of less than $5.00 per share or an exercise price of less than $5.00
per share. The securities will become subject to rules that impose additional
sales practice requirements on broker-dealers who sell such securities. For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchaser of such securities and have received
the purchaser's written consent to the transaction prior to the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
rules require the delivery, prior to the transaction, of a disclosure schedule
prepared by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, among other requirements, monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. Consequently, the "penny
stock" rules may restrict the ability of purchasers in this offering to sell the
Common Stock offered hereby in the secondary market.


33




o We do
not anticipate paying any dividends.




No
dividends have been paid on the common stock of the Company. The Company does
not intend to pay cash dividends on its common stock in the foreseeable future,
and anticipates that profits, if any, received from operations will be devoted
to the Company's future operations. Any decision to pay dividends will depend
upon the Company's profitability at the time, cash available and other relevant
factors.




o Our
stock price may be  highly volatile.




The
market price of our common stock, like that of many other technology companies,
has been highly volatile and may continue to be so in the future due to a wide
variety of factors, including:




·
            announcements
      of technological innovations by us, our collaborative partners or our
      present or potential competitors;


·
            our
      quarterly operating results and
performance;


·
            developments
      or disputes concerning patents or other proprietary
  rights;


·
            acquisitions;


·
            litigation
      and government proceedings;


·
            adverse
      legislation;


·
            changes
      in government regulations;


·
            economic
      and other external factors; and


·
            general
      market conditions.


In
addition, potential dilutive effects of future sales of shares of common stock
by shareholdersand
by the Company could have an adverse effect on the market price of our
shares.




o Our
principal shareholder has significant influence over our company which could
make it impossible for the public stockholders to influence the affairs of the
Company.




Approximately
74% of our outstanding voting capital stock is beneficially held by Arun Govil
the Company’s Chairman, Chief Executive Officer, President and Treasurer. In
addition, Mr. Govil holds a promissory note that may be convertible into
30,000,000 shares of common stock of the Company at his
option.  Consequently, Mr. Govil will be able to control substantially
all matters requiring approval by the stockholders of the Company, including the
election of all directors and approval of significant corporate transactions.
This could make it impossible for the public stockholders to influence the
affairs of the Company.




Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds:




None.




Item
3. Defaults upon Senior Securities:




None


34


Item
4. Submission of Matters to a Vote of Security Holders:




None




Item
5. Other Information:




None




Item
6. Exhibits




31.1
      (2)
              Certification
      of Chief Executive Officer as required by Rule 13a-14 or 15d-14 of the
      Exchange Act, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
      of 2002.31.2
      (2)
              Certification
      of Vice President of Finance and Principal Financial Officer as required
      by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1(2)
              Certification
      of Chief Executive Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act 0f of 2002.32.2
      (2)
              Certification
      of Vice President of Finance and Principal Financial Officer Pursuant to
      18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
      Act 0f of 2002.


35




Signatures




Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.




CEMTREX,
      INC.(Registrant)Dated:
      May 15, 2009
            
            By
            /s/
      Arun GovilArun
      Govil, Chairman of the Board, Chief Executive Officer and President
      (Principal Executive Officer)Dated:
      May 15, 2009
            
            By
            /s/
      Renato Dela RamaRenato
      Dela Rama, Vice President of Finance  (Principal Financial
      Officer)


36